By Al Muskewitz
The management team of LTI Trucking Services looked around the landscape a few months back and figured it was time to make some major moves.
The St. Louis-based carrier was doing well in its own right before, but after comparing its position with the competition it ramped up its driver pay packages in a way that has put it well above industry averages.
During the past five months, LTI has increased its mileage pay for long- and short-haul drivers, adjusted its incentive program, redesigned its lease-purchase program to better benefit the driver and revamped its per diem package to even include former drivers.
“Over time we kind of benchmarked ourselves against our competitors to figure out where we are with all the things drivers care about,” LTI marketing relations manager Christian Civello said. “It’s been an ongoing effort for us to really have a good understanding of how we compare to our competitors and looking at all that the feeling was it was time to make some big changes.”
Bump in base, max pay
For starters, LTI has given all company drivers a 1-cent per mile raise in base pay. In addition, it has raised its max pay for company drivers to 58 CPM and bumped max pay for the loads they’d pick up that run less than 300 miles a whopping 9 cents to 65 CPM.
You could say LTI is looking for drivers for the long haul – that is, staying with the company a long time – and paying big for the short haul.
“It’s not so much as an incentive as it is compensation,” Civello said. “Drivers tend to like longer loads just because overall it’s a more efficient way to make money. By increasing that pay for those shorter loads, we are allowing them to remain just as profitable as they would be with those longer loads. It ensures our drivers are always profitable whether it’s long mileage or short mileage.”
Family-owned LTI transports some of America’s favorite products and consumables on routes that cover the Midwest, East Coast and South, with an additional logistics division to increase its reach nationwide. It specializes in temperature controlled freight, but also hauls dry van freight, truckload and intermodal with a current fleet of about 250 company drivers and a growing number of lease-purchase drivers.
“It is a family company, not just in the sense that it’s a family-run company, but also we feel our drivers are a part of the family,” said Civello, whose father Nick is the company’s owner, president and CEO. “One of the slogans we go by is ‘be a name, not a number,’ and that’s something we do believe in.
“We feel like our company size is pretty good in that it’s big enough to make sure our drivers are profitable and they’re getting the miles they need, but it’s also small enough it has that family feel.”
More incentive to succeed
In addition to increasing pay, the carrier has increased and divided its incentive pay and adjusted the way it’s disbursed.
What previously had been a 3 CPM quarterly productive bonus, is now two separate bonuses totaling 4 CPM – 2 CPM for productivity and 2 CPM for safety – paid weekly; lease purchase drivers and owner operators are eligible for these as well. The company also has increased its max Loyalty Bonus to 4 CPM and offers a $4,500 bonus for every driver referred.
Of all the recent changes perhaps the one company officials seem most excited about is the lease-purchase program they are calling ValueLease. In a nutshell, they’re offering the best lease terms in the industry by providing the most value at the lowest cost.
Typically, when a driver signs a short-term lease on a truck, they end up paying considerably large lease payments. In LTI’s program drivers have the opportunity to own a truck in as little as two years with payments as low as $350-$540 per week depending on the truck and length of lease – with no large down payment, hidden costs or credit check.
Additionally, drivers won’t have to make a lease payment on their first week in the program, ensuring profitability right out of the gate and can defer up to two lease payments a year.
In staying consistent with the new pay policy, ValueLease drivers receive $1.05 per mile on longer loads and $1.11 on shorter ones, plus 3 CPM productivity pay. They also receive fuel surcharge on all miles and a discount of 40-50 cents per gallon on all fuel purchases, discounts that can save drivers more than $7,000 a year.
The program is so popular the number of those type drivers in the fleet has increased 500 percent since the company introduced it December and the long-range goal is to “significantly grow” it even more.
“It’s our genuine belief that it is the best program out there,” Civello said. “Becoming a lease-purchase driver is an investment into one’s future. Some other companies may advertise a high pay-per-mile and a driver will decide to go lease-purchase because they see a larger pay-per-mile and don’t conceptualize what they’re getting into.
“With our program the pay-per-miles is good and definitely up there compared to other companies, but in addition to that our costs are much lower than our competitors. We think if someone is genuinely interested in buying a truck and eventually owning a truck and wanting to be an independent contractor then they will be able to do that most efficiently through us.
“We’re not trying to profit off lease-purchase drivers. We’ve designed the program so profits are passed through to them. We’re not going to be successful if our drivers aren’t successful and this program is designed to ensure their success.”
Per diem changes boost pay
Who doesn’t like paying less taxes and taking home more money?
The way LTI now calculates per diem pay drivers can do both – to the tune of taking home approximately $2,500 more a year for drivers averaging about 1,900 miles a week. By allocating more mileage compensation to per diem versus taxable wages, drivers will save money on their payroll taxes as well as Federal and State income taxes.
The carrier was able to retroactively change the per diem structure for work completed as far back as January 2020, so it distributed hundreds of checks to drivers, some of whom were no longer with the company.
“We felt it was the fair thing to do,” Civello said. “We were happy to make this change going forward and once we found out we’d be able to make it work for past drivers we were even more happy. It’s always good to compensate our drivers, but who doesn’t like getting an unexpected pay check?”
Al Muskewitz is the Editor of Wright Media. He can be reached at firstname.lastname@example.org